IRS News Release: IRS Releases Tax Gap Projections for 2020 and 2021 Tax Years

New tax gap projections for tax years 2020 and 2021 show the projected gross tax gap increased to $688 billion in tax year 2021, a significant jump from previous estimates, the IRS announced Oct 12. The gross tax gap is the difference between estimated “true” tax liability for a given period and the amount of tax that is paid on time. The gross tax gap covers nonfiling of taxes, underreporting of taxes, and underpayment of taxes. The increase underscores the importance of increased IRS compliance efforts in key areas, the IRS stated. [IR-2023-187 (Oct. 12, 2023)]

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